Report: Shale gas, 'tight oil' to boost developing economies

By: PRW REPORT

January 22, 2013

DAVOS, SWITZERLAND — A new report claims that developments in "unconventional" oil and gas exploration will ultimately have a big impact on countries currently trying to play 'catch-up' with existing industrial giants.

Research firm IHS has published "Energy and the New Global Industrial Landscape: A Tectonic Shift," a report designed to coincide with the annual World Economic Forum, which takes place the week of Jan. 21 in Davos.

The report looks at the impact of unconventional energy — namely shale gas and "tight oil" — on world energy markets, the automotive and chemical industries and on the U.S., where shale gas in particular is improving manufacturing competitiveness.

But it is among the developing countries that unconventional energy will eventually make its mark, said Nariman Behravesh, IHS chief economist.

"Initially, this has been — and will continue to be — a big boost for North America," he said, pointing to IHS estimates that argued that growth in this area had led to the creation of 1.7 million jobs and generated $62 billion for the U.S. government.

"However, other regions and countries with large shale gas and tight oil deposits can, with time, also participate in this energy revolution and industrial renaissance."

Behravesh said manufacturing investment was being drawn to the United States, which had seen a drop in energy prices, "posing a risk for Europe and Asia."

Meanwhile "major opportunities" in unconventional energy were being identified around the world, said IHS Vice Chairman Daniel Yergin, although he added that it would take several years before what he called "significant amounts" of shale gas and "tight oil" began to appear in other regions.